"It's pretty obvious that Google has its eye on a number of different areas," said Scott Kessler, an analyst at Standard & Poor's in New York. He rates the shares "hold" and doesn't own them. "Web-enabled applications is clearly one of them."

Writely lets users compose documents on the Web and share them with others, according to notes on Google's Web site Thursday. Google spokesman Barry Schnitt confirmed the purchase. The terms weren't disclosed.

Upstartle released a test version of Writely software in August 2005 and has "many thousands" of registered users, Google said. The service is free during the testing period.

Microsoft Office is the "clear leader" in the market with more than 400 million users, Microsoft spokesman Erik Ryan said in a statement. "We welcome competition in the marketplace and believe it is healthy for the industry as a whole and good for customers."

Writely, Upstartle's main product, allows users to edit and publish documents online, either privately, in collaboration with specific people, or publicly on the Internet, the Web site says.

Users can create documents that have text in different fonts, tables and numbered lists, according to its Web site.

Google said it isn't accepting new registrations for the service until Writely is moved to Google's servers. Upstartle's four employees have joined Google, Schnitt said. He declined to say when the service will be available again.

While Microsoft is testing software for small businesses for delivery over the Internet, the company isn't offering word processing software that is hosted and delivered using the Web.

Google may be targeting Microsoft Office, which generated $11 billion in sales and $7.92 billion in profit in the year ended June 30. Microsoft plans a new release for later this year and is trying to get Office into more consumers' hands at a cheaper price while persuading businesses to buy higher-priced versions.

"I can't imagine that Microsoft would be worried as a result of this," Kessler said. "On the other hand, it's something that probably has attracted their interest."

Google may benefit by adding Writely's software to its existing products such as e-mail and blogger, Jupiter Research analyst Joe Wilcox said.

"Rather than competing with Microsoft Office, Google is looking for a way to beef up the capabilities of those programs, Wilcox said.

Writely's founders said on their Web site they sold to Google to broaden the user base from thousands to millions.